An employer of an establishment deducts an employee's contribution from his wages for crediting the same to the Family Pension Fund as per law but does not credit the same as required by law. The employer

Under Section 405 of the Indian Penal Code (IPC), 1860, the act described constitutes the offence of criminal breach of trust. Specifically, Explanation 2 to Section 405 clarifies that an employer who deducts an employee's contribution for a Provident Fund or Family Pension Fund but fails to credit it to the fund as required by law is deemed to have been "entrusted" with that amount and to have dishonestly used it in violation of a direction of law.

This provision ensures that employers are held criminally liable for misappropriating employee benefits. While such actions also violate specific labour legislations (like the Employees' Provident Funds and Miscellaneous Provisions Act, 1952), they simultaneously attract the criminal provisions of the IPC. A mere promise to deposit the amount later does not absolve the employer of the criminal liability already incurred by the default.